Question

Prepare a statement of Financial Position and an Income Statement for the new legal firm of Dewy, Cheatem, and Howe's first month of operation ending December 31, 2018./ 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. The three partners invested $30,000 cash in the business. Paid premium for two-year liability insurance policy, $1,500. Purchased office equipment with a cost of $20,000 with $5,000 down payment; the balance to be paid over three years $5,000 in computers and $15,000 in furniture. Paid the rent for the month, $900. Purchased $470 of supplies for cash. Received cash for services for the month, $8,750. Billed clients $14,200 for monthly services. Paid monthly utility bill, $210. Partners withdrew $1,000 each for personal use. Received payments of $3,300 from credit clients from (7) above.

Answer 1

Income Statement Particulars Amount ($) Amount ($) Service Revenue 22,950.00 Less :- Expenses Rent Expense -900.00 Utility Expense -210.00 -1,110.00 Current Asset Cash Accounts Receivable Supplies Total Current Assets Prepaid Insurance Office Equipment Balance Sheet Amount ($) Amount ($) 30,970.00 10,900.00 470.00 42,340.00 1,500.00 20,000.00 21,500.00 Debit ($) Credit ($) 30,000 30,000 1,500 1,500 20,000 5,000 15,000 900 Net Income S.No. Account Details 1 Cash Owners Capital 2 Prepaid Insurance Cash 3 Office Equipment Cash Accounts Payable 4 Rent Expense Cash 5 Supplies Cash 6 Cash Service Revenue 7 Accounts Receivable Service Revenue 8 Utility Expense 21,840.00 Total Assets 63,840.00 900 470 470 15,000.00 8,750 15,000.00 8,750 Current Liabilities Accounts Payable Total Liabilities Equity Owners' Capital Retained Earnings 14,200 14,200 27,000.00 21,840.00 48,840.00 210 Cash 210 Total Liabilities & Equity 63,840.00 3,000 3,000 9 Owners Capital Cash 10 Cash Accounts Receivable 3,300 3,300